Expects US biz to lag behind in 2008

UK accounting software giant Sage Group PLC said today that revenues for the year were up 30 per cent, buoyed by a number of key acquisitions. However, the firm also fired off a warning about its underperforming North American unit.

The Newcastle-based company reported group revenues of £1.16bn for the year ended 30 September 2007, in line with expectations.

More Reading

Sage said adjusted pre-tax profit was up by 14 per cent to £251.3m. However, once the effects of amortization and other charges were stripped out, it made a pre-tax profit of £223.3m, up one per cent.

The FTSE 100-listed firm pumped up its dividend for the year to seven pence from 3.59 pence a year ago, but warned that its underperforming American biz would see margins slip in 2008 as it stepped up investment to grow the unit.

Sage's US business grew at around four per cent in the past year, while Europe saw organic growth of 10 per cent with the UK pulling in seven per cent.

Last month the firm, which employs nearly 14,000 staff worldwide, ousted two senior execs at its American division, including CEO Ron Verni.

Sage said in a statement that it was continuing its search for a replacement at the unit and that it expected the role to be filled in the first half of next year.

"While we recognise the current uncertainties in the macro-economic situation, the defensive characteristics of our business model lead us to view 2008 with confidence," said group CEO Paul Walker.

Prior year acquisitions contributed nearly 25 per cent, or £283.4m, of total revenue at the firm. In recent months it has been on a sizeable spending spree with the buy-out of a number of companies including French outfit XRT and Swiss firm Pro-Concept SA.

In a separate statement, Sage today announced that it had hired Mark Rolfe as non-executive director.

He will join the board on 1 December and will work on the audit, remuneration and nominations committees. He will become chair of the audit committee in April next year.

Rolfe previously worked at Gallaher Group PLC in a number of key finance roles for more than two decades. ®